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Golden State Tax Course 2021 2 hr
Terms in this set (77)
An individual who prepares appraisals supporting the valuation of assets in connection with one or more federal tax matters is subject to the regulations contain in Circular 230.
Any attorney who is not currently under the suspension or disbarment from practice before the internal renewal service may practice before the Internal Revenue Service service by filing with the Internal Revenue Service even integration at the tourney is currently qualify as an attorney and is authorized to represent a party or parties.
Certified Public Accountant (CPA)
Any CPA who is not currently under suspicion or disappointment from practice before the IRS and who is totally qualified to practice as a CPA in any state position territory commonwealth or the district of Columbia may practice before the internal renewal service by filing with the Internal Revenue Service A written declaration that the certified public accountant is currently qualified as a certified public accountant and is authorized to represent the party or parties.
Any enrolled agent in active status was not currently under suspension or disbarment from practice before the IRS may practice before the IRS.
Enrolled retirement plan agents
Any enrolled retirement plan agent in active status who is not currently under suspension or disbarment from practice before the IRS practice before the IRS
Any individual who is enrolled as an actuary by the join board of the enrollment of actuaries who is not currently under suspension or disbarment from practice before the IRS may practice before the IRS.
Low income taxpayer clinic student interns
Under certain circumstances a student who is supervised by a practitioner may request permission to represent another person before the IRS.
Unenrolled return preparers
And unrolled return peppery or is an individual other than an attorney CPA enrolled agent in rolled retirement plan agent or enrolled actually who prepares and sign checks preparers returns as the paper per year or who prepares a return but it's not required (by the instructions to the return or regulations) to sign the return.
Other individuals who may serve as representatives
-a family member
Question 1. Which of the following statements is false regarding a text pair who want someone to represent him or her and their absence before revenue officer at an appeal with the IRS?
D. The representative can be anyone who helped the taxpayer prepare the return
Restrictions for Tax Preparers
-Unreasonably delay the prompt disposition of any matter before IRS
-Not knowingly, directly or indirectly except assistance from courses, any person who is under disbarment or suspension from practice before the IRS
-Accept assistance from any former government employee were provisions of Circular 230 or any federal law would be violating
-Who is a notary public and is employed as counsel, attorney, or agent in the matter before the IRS or has a material interest in the matter, cannot engage in any notary activities related to the matter
-Must not endorse or otherwise negotiate any refund check by any means excepting payment by any means, Electronic or otherwise in an account owned or controlled by a practitioner or any firm or other entity with whom the practitioner is associated issued to the taxpayer
Individuals lose their eligibility to practice before the IRS in the following ways:
Not meeting the requirements for renewal of enrolled
Requesting to be placed in inactive retirement status
Being suspended or disbarred by the office of professional responsibility for violating the regulations governing practice before IRS
1. Regulate the practice of representatives of
person before the department of treasury and
2.Before a meeting every percent enough to practice, require that the representative demonstrate:
A. Good character
B. Good reputation
C. Necessary qualifications to enable the representative to provide to persons valuable service.
D. Competency to advise and assists persons in presenting their cases.
After notice an opportunity for a proceeding, the secretary may reprimand, suspend or disbar from practice before the department, or censure, A representative who:
1. Is incompetent
2. Is disreputable
3. Violates regulations prescribed under the section
4.With a tent to the front, waffly and no mainly miss leads or threatens to person being represented or perspective person to be represented.
After notice an opportunity for a hearing to any appraiser, the secretary may:
1. Provide that a person rules by such appraiser shall not have any probative effect on any administrative proceeding before the Department of Treasury or the Internal Revenue Service.
2. Bar such appraiser from presenting evidence or testimony and any such proceeding.
Generally with respect to tax advice, the same common law protections of confidentiality which apply to a communication between a taxpayer and an attorney should also apply to a communication between a Taxpayer and any
Federally authorize Tax practitioner to the extent that the communication would be considered a privilege communication it if it were between a taxpayer and an attorney
Federally authorize Tax practitioner
An individual who is authorized under federal law to practice before the Internal Revenue Service if such practice is subject to federal regulation under section 330 of title 31 United States Code
Advice given by an individual with respect to a matter which is within the scope of the individuals authority to practice
Sarbanes-Oxley Act of 2002
July 30, 2002 President Bush signed into law the Sarbanes-Oxley Act of 2002 he characterize as
"The most far reaching reforms of American business practice test since the time of Franklin Delano Roosevelt"
PCAOB (Public Company Accounting Oversight Board)
Is a nonprofit corporation established by Congress to oversee the audits of public companies to protect investors and the public interest by promoting accurate independent audit reports.
Also monitors the audit of brokers and dealers including compliance reports filed pursuant to federal security laws
Is divided into five distinct subparts:
Sets forth rules relating to that already to practice before the internal revenue service
Prescribes the duties and restrictions relating to such practice
Prescribe the sanctions for violating the regulations
Contains the rules applicable to this disciplinary proceedings
Contains general provisions relating to official records
Office of professional responsibility
Generally have responsibility for matters related to protection or conduct and Sean have exclusive responsibility for discipline, including disciplinary proceedings and sanctions
Question 2. A tax return prepare your must complete the paint repairs area of the return if which of the following is true?
B. The individual was paid to prepare, assist in preparing or review the tax return
Contains rules governing attorneys, certified public accountant, enrolled agent, and rolled retirement plan agent, register tax return papers, and other persons represented taxpayers before the IRS
Must obtain 72 hours of continuing professional education (CPE) every three years
Enrolled agent will be automatically classified as " in active" if he or she feels too:
Meet the CPE requirements for his or her EA license renewal
Submit his or her enrolled agent license renewal by the due date
Me any other condition of renewal
An enrolled individual will be placed on the roster of inactive enrolled individuals for a period of three years if he or she:
Fails to represent timely to the notice of non-compliance with the renewal requirements
Fails to file timely the application for renewal
Does not satisfy the requirements of urge ability for renewal
Annual Filing Season Program (AFSP)
18 hours per year voluntarily
6 hours and your federal tax refresher course
2 hours of ethics
10 hours of federal tax law
72 hours over three years Enrollment cycle
Minimum of 16 hours per year
Two of Which must be on ethics
Enrolled retirement plan agent
72 hours over three years enrollment cycle
Minimum of 16 hours per year
Two of which must be on ethics
The name of the CPE provider organization
the location of the program
the title of the program, approval number receipt
for the program , and a copy of the program content
written outlines, course syllabi, textbook and or electronic materials provided or required for the program
the dates attended
the credit hours claimed
the names of the instructors, discussion leaders, or speakers if appropriate
their certificate of completion and or signed statement of the hours of attendance obtain from the count from the continuing professional education provider
Continuing professional education providers
Development by qualified individual
current subject matter
qualified instructors discussion leaders and speakers
evaluation or technical content and presentation
certificate of completion
maintenance of participant attendance and completion for four years
Question 3. Which of the following individuals is not audible to practice, on a limited basis, before the IRS?
A. A limited partner in a partnership me represent the partnership
Covers relationships between the practitioner in the IRS on the practitioner and the client.
They are 19 specific rules about the relationships between the IRS and the client
Information furnished to the IRS
Information requested by the IRS is to be probably submit it unless the petitioner has good reason to believe that information is subject to attorney/client privilege
There are several rules regarding advertising in solicitation of business.
And example of a business name that is misleading is "Pay Less Tax Service"
Additionally, enroll agents can I use the term certify or give the impression of an employee relationship with the IRS
Negotiation of Taxpayer checks
A practitioner who prepares tax returns may not endorse or otherwise negotiate any check excepting payment by any means electronically or otherwise into an account on or controlled by a practitioner or any firm or any intensity with whom the protection or is associated issue to a claim by the government in respect to a federal tax liability.
Tax returns and document standards
A Tax preparer you cannot willfully sign a tax return or advise the client knowing that the return, documentation, or other submitted pay first like a reasonable basis, or is an unreasonable position, or is the willfully attempt to understate the text I am reading or a reckless disregard of rules by the Preparer.
federal tax matter
1. A renewal provision as defined in section 6110(I)(1)(B)of the internal revenue code
2.Any provision of law impact in a persons obligations under the internal rules and regulations including but not limited to the persons liability to pay tax or obligation to file Returns
3.Any other law or regulation administrated by the Internal Revenue Service
Written advice is the reliance opinion if the advising concludes add a confidence level of "at least more likely than not" (a greater than 50% likelihood ) that one or more significant federal tax issues will be resolved and the taxpayers favor.
Written advice is a marketed opinion if the practitioner knows or has a reason to know that the written advice will be used or referred to by a person other than the practitioner (or a person who is a member of, associated with, or employed by a practitioners firm) in promoting, marketing or recommending a partnership or other intensity, investment plan or arrangement to one or more taxpayer(s)
To promote and maintain the public confidence in tax advisers the internal renewal service is authorized to establish one or more advisory committee is composed of at least six individuals authorized to practice before the internal renewal service. Memberships of an advisory committee must be balance among those who practice as attorneys, accountants, enrolled agent, and rolled actually is, enrolled retirement plan agents and registered tax returns preparers.
Question 4. Section 10.35 of the Circular 230 states a text practitioner must process the necessarily competence to engage in practice before the Internal Revenue Service. Which of the following is not included as it comes sentence requirement under section 10.35 of Circular 230?
D. Completing mandatory tax law courses at a accredited university or college
Sanctions for Violation of the Regulations
Question 5. How is proceeding for a violation of regulations in circular 230 institution against a tax practitioner?
B. But I always representative find a complaint name in the text practitioner and filed a complaint with the administrative law judge (ALJ)
Rules applicable of disciplinary proceedings
Clear and concise description of the facts and law that constitute the proceeding
Specific sanction sought
Time for answering the complaint
answer/ the practitioner's answer must be filed with the Administrative Law Judge
Grounds of defense (general denials are not permitted)
Admission or denial of each allegation
Acknowledging statement and signature
Hearing / Administrative Law Judge( ALJ )
All hearings will be recorded and transcribed
Decision / Administrative Law Judge
Disbarment- the practitioner will not be allowed to practice before the IRS unless and until authorized to do so
Suspension - the practitioner will not be allowed to practice before the IRS during the suspicion period
Censure - the practitioner will be permitted to practice before the IRS but may be subject to conditions
In general, a disbarred practitioner me petition for When reinstatement in five years following disbarment, suspension or disqualification if shorter than five years.
Suspension or disbarment
Prepare or file documents including tax returns or other correspondence with the IRS
Render ridden advice with respect to any insanity, transaction, plan or arrangement, or other plans or arrangement having a potential for tax avoidance or evasion
Represent a client I conferences, hearings, and meetings
Execute waivers , concerns, or closing arrangements; receive a text Paris refund check; or sign a tax return on behalf of a taxpayer
Fire powers of attorney with the IRS
Accept assistance from another person (or request assistance) or is this another person (or offer assistance as assistance) if the assistance Relates to a matter constituting practice before the IRS or Enlist another person for the purpose of eating and abetting practice before the IRS
State or imply that he or she is eligible to practice before the IRS
Appeal from administrative decision
Both OPR on the practitioner have the right to appeal the initial decision and order of the ALJ to the department of the treasury within 30 days of being served
Accuracy Related penalties
1. Negligence or disregard of rules or regulations
2. Substantial understatement of tax
3. Transaction lacking economic substance( increased to 40% for gross valuation misstatement)
4. Transaction lacking economic substance (increased to 40% for undisclosed transaction lacking economic substance)
5. Undisclosed foreign financial asset understatement (40% in all cases)
The understatement is substantial if it is more than 10% of the correct tax or $5000.
Complete and attach IRS Form 8275 - Disclosure Statement to the tax return and disclose all relevant facts.
Make a reasonable attempt to comply with the internal revenue laws
Exercise ordinary and reasonable care in preparation of tax return
Keep adequate books and records or to substantiate items properly
Failure to File Penalties
The penalty is 5% per month up to a maximum of 25%
For failure a tax return is due on April 15 & tax preparer files an automatic 6month extension until Oct 15 , to be atleast 90% of the tax shown on the return when filed
civil fraud penalty
Can include a penalty of up to 75% of the underpayment of tax attributable to fraud
Criminal convictions of promoters and investors may result in fines up to 250.000 & up to five years
Frivolous Tax Return Penalty
If taxpayer files a frivolous return the penalty may be 5000
Jointly file the return and the taxpayer and their spouse may be liable for $5000 each
Question 6. When a tax practitioner prepares a tax return in which the taxpayer claims the Earned Income Tax Credit EITC all of the following are true except:
B. No special requirements apply to return screaming earned income tax credit (EITC)
Understatement of taxpayer's liability
Due to unreasonable position- A first- tier penalty for an under a statement due to recent unreasonable position is greater of 1000 or 50% of income derived with respect to the refund claim
Due to willful or reckless conduct- A second teir penalty for an understatement due to Wolfle and reckless conduct is the creator of 5000 or 75% of income device with respect to the refund claim
Negotiation of taxpayer checks
A $545 Penalty may be impose for a tax preparer who endorse or otherwise negotiate a new check issue to a client by the government and respect to a federal tax liability
Promoting abusive tax shelters
The penalty for promoting abusive tax shelters is generally equal to $1000 or less or 100% of income to buy from each organization or sell of the abusive pan.
Aiding or abetting in tax liability understatement
Tax return preparers also may be penalized $1000 for aiding and abetting and underestimate of text liability on a return
The penalty is $10,000 if conduct relates to a corporation's tax return
Disclosure or use of information
Unauthorize disclosure- The penalty of $250 for each on authorized disclosure or use of information furnish in connection with the taxpayer return but they maximum penalty of $10,000 per calendar year
Knowing or Reckless Disclosure- Upon conviction of a messenger a fine of up to $1000 or imprisonment for up to one year or both along with the cost of prosecution
Ruffle preparation of a false or fraudulent return
Guilty of a felony- Upon conviction the practitioner me face a fine up to $100,000 or imprisonment for up to one year or both along with the cost of prosecution
Guilty of a misdemeanor- Upon convection, the petitioner may face a fine up to $10,000 or imprisonment of up to one year or both. A fine amount of up to 50,000 may be impose if fraud involves the corporation
Identify the individual below who is not eligible to practice before the IRS. None of the individuals are under suspension or disbarment
C. certified financial planner
After notice an opportunity for proceeding, the secretary may re-remind, suspend, or does far from practice before the department A representative who comments any of the following actions except
With intent to defraud , willfully and only misleads or threatens the person being representative or perspective person to be representative
Which of the following types of tax practitioner disciplines it's not included in Circular 230?
B. refund offset
Annual filing for an program (AFSP) participants have limited representation rights, meaning they can represent client who's returns they prepared and sign before which of the following entities
A. Revenue agents
Amanda Jones is a tech practitioner who is representing Sean and Diane Smith before the wage and investment division of the Internal Revenue Service. The IRS is questioning Sean and Dean on contributions that were listed on thier 2020 form 1040. While reviewing the documentation provided by Sean and Diane Amanda discovers contributions that were made to a non-qualified organization. What is the appropriate action for Amanda to take?
D. Amanda must immediately advise the Internal Revenue Service examiner of the non-qualified contributions
Which of the following statements is correct with respect to a clients request for records of the client aren't necessarily for the client to comply with his or her federal tax obligations?
A. The practitioner may never return records on the client to the client even if the client request prompt return of the records
Under section 10.51 of Circular 230 which of the following is not considered an example of this reset beautiful contact for which a text practitioner can be censored or suspended?
C. Knowingly and abetting another person to practice before the Internal Revenue Service during a period of suspension or disbarment .
Jack Smith was suspended from practice for four months by the IRS. Which of the following is he permitted to do during the period of suspension?
Represent a client at conferences, hearing, and meetings
Both the office a professional responsibility and the practitioner have the right to appeal the initial decision an order of the administrative law judge (ALJ) to the Department of treasury with them now how many days been served?
D. 30 days
Under the Tax Cuts and Jobs Act ( TCJA), due to the diligence requirement now also applies to individual income tax returns play me which of the following tax benefits?
B. Head of household filing status
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